PAID Program to Facilitate FLSA Wage and Overtime Compliance
In accordance with the mission of the Dept. of Labor’s (DOL) Wage and Hour Division to promote and achieve compliance with FLSA labor standards, designed to protect and enhance the welfare of the nation’s workforce, the DOL announced a new pilot program – the Payroll Audit Independent Determination (PAID) program.
The purpose of PAID is to discover and expedite resolution of unintentional overtime and minimum wage violations as defined by the Fair Labor Standards Act. DOL’s intent is that the PAID program will ensure that more employees receive any back wages they are owed, due to a misunderstanding of FLSA regulations, in a more efficient and timely manner.
The program is designed to benefit both employees and employers.
For employees, the PAID program ensures they will receive 100% of any back wages paid, in an expedited manner, without drawn out court proceedings and associated legal expenses that are applicable to their case, expenses that can be significant depending on the amount of the wages due.
On the employer’s side, the DOL noted that PAID program resolutions will not impose penalties or liquidated damages to the final settlement for cooperative employers who proactivley participate in the program and work with the Division to resolve potential compensation errors. The DOL noted that employers who are involved in a current investigation or litigation will not be allowed to participate in the PAID program.
The DOL will also not allow employers to use the PAID program more than once to resolve violations as officials noted the program is designed to allow employers to learn the FLSA, identify issues and correct potentially non-compliant practices, not make it easy to continually get away with non-compliant practices. As a result, settlements will be limited in scope to only the potential violations that are brought to the DOL’s attention or discovered during their resolution. The program requires employers to review the Division’s compliance assistance materials, carefully audit all their pay practices, and agree to correct any non-compliant the practices going forward.
The DOL allocates significant resources to ensure businesses comply with the FLSA when it comes to wages and overtime. Fines for non-compliance can be very punitive. The PAID program is the DOL’s attempt to use a carrot instead of a stick to encourage compliance. The program is designed to facilitate quick resolutions of potential violations, without litigation, and ensure prompt payment to employees of any wages they may be due.
The DOL will implement the PAID program for a period of 6 months. After which, they will review the success of the program and consider future options. The DOL encourages employers to audit their compensation practices to identify potential non-compliant situations. The DOL believes this program will improve employers’ compliance with minimum wage and overtime obligations and help ensure employees’ rights are protected.
More information concerning the PAID pilot program is available at www.dol.gov/whd/paid.
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